DALLAS -- Less than two years ago, Greyhound Lines Inc., the country's only intercity bus company, was bankrupt and hurting for passengers. Today it's rolling merrily along.

"The turnaround is completed. We'll be profitable this year. What we're now beginning is the new era of growth for Greyhound," said Craig Lentzsch, who became president and chief executive of the line of 2,100 buses in 1994.

The Dallas-based bus business has wooed back passengers through coordinated service with other lines and new ticket price options.

"We think if you have more places for customers to go, you get more customers," Mr. Lentzsch said.

It's been a long and winding road for Greyhound.

Intercity bus ridership fell steeply in the 1960s as air travel grew more popular. The company was sold by Dial Corp. in 1987 and ultimately filed for bankruptcy protection. It emerged in 1991, but due to dwindling passenger traffic, heavy debt and mounting losses, Greyhound continued to struggle with creditors until 1994, when it opted to control the damage by cutting back on some operations.

The company is now emerging strong and, Mr. Lentzsch believes, ready for expansion.

"All the numbers have been looking better," said Christopher Kane, an analyst with Salomon Brothers. "Now the challenge will be going forward."

The company has made numerous expansion moves already this year, most recently buying a North Carolina bus line for $20.3 million in cash and stock.

Also this year, Greyhound, which has annual revenue of more than $700 million, opened a new bus terminal in Chattanooga, Tenn., and financed 109 new buses.

In addition, the company announced joint operations with several bus companies to improve operating efficiencies and increase the available routes.

"If the pie is bigger, it's easier to split up the pie. We don't see any reason to fight the other bus companies for customers," Mr. Lentzch said.

Some of the agreements include Peter Pan Bus Lines Inc. to reach the New York to Philadelphia routes; Capital Motor Lines and Colonial Trailways to reach more cities in Alabama, Mississippi, Florida and Georgia; and SITA Inc., to offer service from Los Angeles into the interior of Mexico, a first move past the border cities for Greyhound.

Passengers are responding. Greyhound's ticket sales increased 14.5 percent in January over the same month in 1996 and 10.5 percent in February.

"We think we're off to the best start for a calendar year since 1989," Mr. Lentzsch said.

Still, all isn't rosy. Yield per passenger mile declined in January by 2.7 percent over the same month last year to 8.97 cents, and fell 3.4 percent in February to 8.87 cents. The drop reflects the advance-purchase discount fares -- similar to the those offered by the airlines -- that Greyhound is now offering.

An example is a bus trip from New York to Los Angeles. Currently that would cost a walk-up customer $129. If the ticket was bought 21 days in advance, it would cost $59.

"If you checked that price in 1994 it was $269. Big difference, especially for our customer," said Mr. Lentzsch.

Company demographics describe the typical bus passenger as very young or elderly, a budget traveler who is not worried about time.

Rosy Garza, 18, fits the profile. She, her toddler and her 16-year-old sister traveled from Carrizo Springs, Texas, to Illinois. During their 36-hour journey, they'll travel from Carrizo Springs to San Antonio, then to Dallas, then Chicago, and finally to Moline, Ill.

"Money is the primary reason we're riding the bus. The airplane is probably too expensive," she said during a stop in Dallas.

Finances also were why Denise Mastne, her three children and her husband decided to take a — 1/2-day bus trip from Portland, Ore., to their new home in Daytona Beach, Fla.

"It's very, very affordable," she said.

Getting customers like the Garzas and the Mastnes to travel more often is Mr. Lentzsch's goal.

To attract them, the company added to the schedule in 1995 and 1996, and plans to add more times and routes this year to its current 2,400 destinations.

"We've taken over some routes in the Wisconsin area and we're also trying to create some casino markets," Mr. Lentzsch said. "We have a good product, a good reliable product. We let people travel where they want to travel, when they want to travel, at an affordable price."

Photo by The Associated Press

Greyhound bus driver Godwin Uchegbu helps Robert Mastne, 6, with his case as he gets off the bus in Dallas. Dallas-based Greyhound is seeing growing numbers of passengers and reported a profitable fourth quarter for the first time in four years. The company is coordinating operations with other lines to give riders more options.